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Savings 'extravaganza' expected as Brits choose to save

27 May 2009 / by Rebecca Sargent
After five years of increasing debt levels, Brits are finally turning from spending sprees to saving sprees, research from Mintel has revealed.

According to the study, 13 per cent of Brits intend to increase their savings over the next year, while a further six per cent who are not current savers intend to start saving soon, meaning there could soon be a savings extravaganza.

This is despite a large number of Brits who have insufficient funds to save, in addition to the 22 per cent who would rather concentrate on paying off their debts.

Commenting on the findings, Toby Clark, head of financial services at Mintel said: "Pre-credit crunch, the idea of building up rainy day savings was starting to look a little old hat – it seemed much easier to turn to cheap credit or release a little more money by remortgaging.

"As credit has become harder to find and the economic climate more uncertain though, people seem to be rediscovering the savings habit," he added.

According to the research house, "it is not too surprising" that some Brits are finding themselves unable to save, given the impact of the credit crunch and the weak economic climate.

However, Mintel believes that fear of financial uncertainty is also stimulating the rise in precautionary saving. Commenting, Mr Clark added:

"With almost 15 million Brits saying they would like to save on a regular basis but cannot do so through lack of funds, it is clear there is a strong latent demand for saving schemes that encourage people to put aside relatively small amounts of cash on a regular basis."

Meanwhile, the research also found that there is still a relatively high degree of savings apathy in the market as four in ten Brits say they have had savings with the same company for most of their lives, while 14 per cent also admitted to falling behind with interest rate changes.

However, one in ten savings account holders said that they do move their savings to get the best rates, Mr Clark added: "Over the last decade or so, there has been a decline in the level of customer inertia, and savings account providers can now no longer take their customers' loyalty for granted."

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